Monday, February 14, 2011

Head Of Florida Foreclosure Mill Ordered Into Court To Explain Dubious Document Filings In Recently-Dismissed Suit

The Palm Beach Post reports:

  • On Thursday, Fannie Mae cited document "execution issues" as the reason it terminated the law firm. Ben-Ezra & Katz becomes the second south Florida law firm making a mass exodus from the foreclosure business. The Plantation law firm of David J. Stern began dumping thousands of its Fannie Mae cases late last year after evidence of robo-signing and other faulty documents became known.

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  • Miami-Dade Circuit Judge Maxine Cohen Lando expressed her displeasure Friday in a case that involved a property in Homestead with a $265,134 foreclosure judgment issued in July. Lando said the so-called original note and original mortgage were filed months after the bank said those documents were lost.

  • "That in itself is a fraud upon the court," Lando wrote in an order to show cause as to why she should not hold Ben-Ezra & Katz attorneys in contempt. But, she added, the action "pales in comparison" to the fact that the mortgage and note are to a different property in Lehigh Acres, and that the documents are improperly signed and notarized. Lando said her verbal contempt finding on Friday would be followed by a written order.

  • Although Marc Ben-Ezra, 44, was not the direct attorney handling the case, the homeowner's attorney Maria Mussari said the judge ordered the owner or head of the firm to appear. Ben-Ezra has no disciplinary history with the Florida Bar . The judge dismissed the foreclosure case and banned the lender from refiling it.(1)

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  • Fannie Mae set a deadline of Tuesday for servicers to find new firms to handle the Ben-Ezra & Katz cases. But finding replacement lawyers has proven to be frustrating. Statewide, Ben-Ezra & Katz has handled at least 18,000 cases, according to Legalprise, a West Palm Beach data analysis firm.

For the story, see Lawyer held in contempt over 'fraud' in foreclosure filing.

For Judge Lando's ruling, see Central Mortgage Co. v. Gonzalez Del Real.

Thanks to Brian Davies for the ruling.

(1) No doubt Ben-Ezra is preparing to invoke what some judges have facetiously referred to as the "pure heart and empty head defense" in an attempt to minimize any possible sanctions.

See, e.g.:

  • In re Rivera, 342 B.R. 435, 460 (Bankr. D. N.J. 2006), stating that the "pure heart and empty head defense" was unavailable to a law firm facing Rule 11 sanctions in a bankruptcy case that resulted in the imposition of a $125,000 fine on the firm in connection with the chronic filing of unreviewed paperwork in foreclosure actions.

  • Warner v. Hillcrest Medical Center, 914 P.2d 1060 (Okla. Ct. Civ. App. 1995), stating:

    "Whether or not the acts of an attorney are done in good faith is no longer the test. "`[T]he new test represents an intentional abandonment of the subjective focus of [§ 2011] in favor of an objective one.' `Simply put, subjective good faith no longer provides the safe harbor it once did.' `There is no room for a pure heart, empty head defense under [§ 2011].'" First National Bank and Trust Company of Vinita v. Kissee,     859 P.2d 502, 512 (Okla. 1993) (footnotes omitted). "Rule 11 requires lawyers to think first and file later, on pain of personal liability." Stewart v. RCA Corp., 790 F.2d 624, 633 (7th Cir. 1986).

posted by Home Equity Theft Reporter at 4:04 AM